Published: Sat, May 13, 2017
Markets | By Erika Turner

Anthem gives up Cigna bid, vows to fight on over damages

Anthem gives up Cigna bid, vows to fight on over damages

After the court ruled against the merger and Anthem's announcement of an appeal, Cigna brought a lawsuit in which it said the deal was over and it was entitled to $13 billion damages from Anthem as well as the agreed-upon breakup fee of $1.8 billion.

Anthem Inc (ANTM.N) on Friday called off a $54 billion (41.89 billion pounds) deal to buy Cigna Corp (CI.N), one day after the second-largest USA health insurer lost a DE business court ruling that could have kept alive the chances of a combination.

A judge effectively killed off any practical chance of Anthem Inc ANTM.N merging with Cigna Corp CI.N on Thursday as he declined to order Cigna not to terminate the deal.

The two companies exchanged lawsuits in the wake of a separate ruling earlier this year that blocked Cigna's proposed $48bn acquisition of Anthem, after U.S. antitrust regulators ruled that its effect "may be substantially to lessen competition" in "what is already a highly concentrated market".

Cigna confirmed the decision in an emailed statement on Thursday, adding: "We look forward to closing this final chapter". Anthem didn't immediately respond to a request for comment.

This morning, health insurance giant Anthem dropped its troubled bid to take over one of its top competitors, Cigna.

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The judge stayed the ruling temporarily so Anthem can consider whether to seek appellate review, a decision it must make by Monday.

A federal judge blocked the deal in February and an appeals court upheld the decision against Anthem last month.

On Thursday, the DE court denied Anthem's request to keep Cigna in its expired $54 billion merger agreement.

Anthem had said a combination with Cigna would have helped the companies negotiate better prices with pharmaceutical companies, hospitals and doctor groups.

"The termination of the Anthem-Cigna merger is a clear victory to preserve competition in the health insurance industry", American Medical Association President Andrew W. Gurman said in a statement.

Anthem said it has worked hard to complete the merger that was approved by over 99 percent of the votes cast by the shareholders of both companies. Acrimony between the companies already was high by the time the Justice Department's case against the merger went to trial last November. Anthem is asking the U.S. Supreme Court to overturn a ruling finding the deal flawed, though the court is unlikely to weigh in now that Cigna has been allowed to walk. Meanwhile, Anthem is suing Cigna.

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